Tribunal affirms deletion of additions, citing genuineness of liabilities & transactions. Revenue appeal dismissed. The Tribunal upheld the CIT(A)'s decision to delete both additions, emphasizing the genuineness of the liabilities and transactions claimed by the ...
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Tribunal affirms deletion of additions, citing genuineness of liabilities & transactions. Revenue appeal dismissed.
The Tribunal upheld the CIT(A)'s decision to delete both additions, emphasizing the genuineness of the liabilities and transactions claimed by the assessee. The appeal by the Revenue was dismissed on 30th June 2022.
Issues: 1. Addition of Rs. 75,58,000 as unascertained liability. 2. Addition of Rs. 4,82,15,440 as loss claimed in trading in foreign exchange.
Analysis:
Issue 1: Addition of Rs. 75,58,000 as unascertained liability The case involved an appeal by the Revenue against the First Appellate order for the assessment year 2012-13. The Assessing Officer (AO) disallowed an amount of Rs. 75,58,000 claimed by the assessee under "Compensation due to Rate difference" as an unascertained liability. The AO believed the provision should have been created in the balance sheet and disallowed the amount due to non-payment after 3 years. The CIT(A) deleted this addition. The Revenue contended that the assessee failed to establish the justification and nature of the liability. The Tribunal observed that the payment of Rs. 1,51,00,000 was made after settlement, indicating the liability was not unascertained. The Tribunal upheld the CIT(A)'s decision, stating the AO's findings were based on suspicion and surmises.
Issue 2: Addition of Rs. 4,82,15,440 as loss claimed in trading in foreign exchange The AO disallowed an amount of Rs. 4,82,15,440 booked as "Loss in Currency F & O" as part of revenue from operations, considering it beyond the ordinary course of business. The CIT(A) deleted this addition. The Revenue argued that the losses in foreign exchange trading were not genuine. The Tribunal noted the company's MOA allowed for such investments as part of its business. The documents provided, including contract notes and client codes, supported the genuineness of the transactions. The Tribunal found no grounds to interfere with the CIT(A)'s decision, stating that the transactions were not sham. Consequently, all grounds were determined against the Revenue, and the appeal was dismissed.
In conclusion, the Tribunal upheld the CIT(A)'s decision to delete both additions, emphasizing the genuineness of the liabilities and transactions claimed by the assessee. The appeal by the Revenue was dismissed on 30th June 2022.
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